Stats

May 09, 2016

A Clarifying Observation

If you've ever listened to a Democrat argue about income inequality you've probably noticed that Democrats picture the U.S. economy as a zero sum situation. In other words, the rich get richer only by taking money away from somebody else who, as a result, gets poorer. After all, money has to come from somebody.

It doesn't take a rocket scientist to figure out that the zero sum viewpoint is not necessarily true. Just ask lefties Sean Penn, or Susan Sarandon, how many people were pushed into poverty so that they could be paid vast sums for their roles in Dead Man Walking. Nobody, of course. Successful movies generate a lot of economic activity which creates wealth on a large scale. Even the movie goers, who ultimately pay all the salaries, are richer for the experience (at least the ones capable of sitting through a feature length film that has Penn or Sarandon in it). Point is, actors don't have rob anybody else for their big paychecks.

However, it's true that someone can get poorer. When the movie turns out to be a bomb, investors get poorer, but then they generally know it's a gamble when they put up the dough.

But the win-win scenario, such as the in the example of a successful movie, is not always the case. There are situations where one person gets money only at the expense of somebody else. The observation below by Dan Mitchell explains when this is most apt to happen. It also explains why Democrats are inclined to see the economy in zero sum terms. Their economy works that way.

From a micro perspective, when government allocates money, you can only make yourself better off by taking from others. In a market economy, you make yourself better off by serving others.

Democrats — Taking from others. It's who they are.

On a side note, this illustration helps to explain why government is so wasteful.

Democrats — The party that espouses government control of virtually everything.